FTC Returns Nearly $3 Million to Homeowners Duped by Mortgage Relief Scam That Preyed on Veterans and the Elderly
WASHINGTON — The Federal Trade Commission is mailing nearly $3 million in refund checks to more than 1,800 homeowners who were deceived by a mortgage relief scheme that falsely promised to reduce monthly payments and prevent foreclosures — a scam that federal and state authorities say disproportionately targeted vulnerable elders and veterans.
The scheme, which operated under a web of business names including Golden Home Services, Home Matters USA, Academy Home Services, Amstar Service Group, Atlantic Pacific Service Group, Home Relief Service of America, and Westwood Advocates, took millions of dollars from struggling homeowners seeking relief from financial distress.
In response to a lawsuit filed jointly by the FTC and the California Department of Financial Protection and Innovation (DFPI), a federal court found that the defendants defrauded more than 3,000 people nationwide, many of whom were already facing the prospect of losing their homes.
The court banned the companies and their operators — Michael R. Nabati, Armando Solis Barron, Dominic Ahiga (also known as Michael D. Grinnell), and Roger S. Dyer — from the telemarketing and debt relief businesses entirely. It also required them to turn over $19 million for consumer refunds and civil penalties.
“We’re returning nearly $3 million now to 1,821 affected homeowners,” the FTC announced. Recipients are being instructed to cash their checks within 90 days, as indicated on the payment.
“Our win in this case sends a clear message to scammers who target consumers facing financial hardship: the FTC and our law enforcement partners are focused on fighting fraud and halting it,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We look forward to more opportunities to partner with the California DFPI on behalf of consumers.”
The court found that the defendants falsely promised to reduce homeowners’ mortgage payments and prevent foreclosures, extracting millions from distressed homeowners who could ill afford to lose more money. The scheme particularly harmed older Americans and veterans — populations the defendants allegedly viewed as especially desperate and trusting.
“This case also demonstrates the value of the California Consumer Financial Protection Law as a tool to combat deceptive and predatory financial schemes,” said DFPI Commissioner Clothilde Hewlett. “Fraudsters everywhere should take note – DFPI will find you, expose you, and hold you accountable. Victims of fraud should likewise take heart. The DFPI has your back.”
The court’s orders bar the individuals and their companies from directly or indirectly engaging in telemarketing, debt relief services, or making any misrepresentations or unsubstantiated claims about any product or service — effectively shutting down their ability to operate similar schemes in the future.
Consumers who have questions about their refund payments can contact JND Legal Administration, the refund administrator, at 1-833-674-0067, or visit the FTC website for frequently asked questions about the refund process.
The FTC emphasized that it never requires people to pay money or provide account information to receive a payment, warning consumers to be alert for follow-up scams that commonly target individuals who have been defrauded.
The Federal Trade Commission works to promote competition and protect and educate consumers. Consumers can report fraud, scams, and bad business practices at ReportFraud.ftc.gov.
Timeshare Exit Scam That Preyed on Seniors Results in $140 Million Judgment Against Operator
WASHINGTON — A federal court has ordered one of the key operators of a massive timeshare exit scheme to pay $140 million and permanently banned him from marketing similar services after authorities alleged the fraud cheated consumers — mostly older adults — out of more than $90 million.
The court granted summary judgment against Christopher Carroll, who served as president and CEO of the Square One Group, one of several corporations used to perpetrate the scheme. Carroll is the last remaining defendant in a case originally filed in November 2022 by the U.S. Department of Justice — on behalf of the Federal Trade Commission — and the state of Wisconsin.
The court ordered Carroll to pay $95 million in redress to consumers and a $45 million civil penalty, which by law goes to the U.S. Treasury.
“The defendants used scare tactics and high-pressure sales pitches to coerce seniors into forking over thousands of dollars for timeshare exit services they didn’t deliver,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC appreciates the partnership of the Department of Justice and the Wisconsin Attorney General in putting a stop to this scheme.”
The Missouri-based scam operated under a web of names, including Consumer Law Protection, Premier Reservations Group, Resort Transfer Group, Timeshare Help Source, and Square One. Since at least 2018, the defendants used direct mail and in-person “seminars” to pressure consumers — primarily older adults — into paying for timeshare exit services that were never delivered.
According to court documents, the scheme employed a range of deceptive tactics:
- Bogus affiliation claims: Sales pitches falsely employed logos of legitimate timeshare companies and trade groups to lead consumers to believe their services were endorsed or “authorized” by major timeshare companies.
- Deceptive claims about exit options: The defendants falsely told consumers they could not exit a timeshare on their own without paying exorbitant fees. They also threatened that if consumers didn’t buy their service on the day of the sales pitch, they would never be able to exit their timeshare.
- Baseless fears about heirs: The scheme exploited fears that consumers’ heirs would be saddled with ever-increasing maintenance fees after they died, pressuring them to pay for expensive exit services. In fact, states have procedures allowing heirs to disclaim any timeshare inheritance.
- Refusal to honor refund guarantees: The defendants’ sales documents included a “guarantee” of full refunds if they failed to deliver. But when consumers called to request refunds, the defendants cited non-existent litigation, the COVID-19 pandemic, or other phony reasons — and then denied nearly every refund requested.
- Illegal contract terms: The defendants pressured consumers to sign contracts stating they were not allowed to cancel — a direct violation of the FTC’s Cooling-Off Rule, which guarantees consumers the right to cancel a door-to-door sales contract within three business days.
In addition to the $140 million judgment, the court’s order permanently bans Carroll from advertising, marketing, promoting, or offering for sale any timeshare exit service; from engaging in any deceptive door-to-door sales; and from engaging in other deceptive and misleading conduct detailed in the complaint.
The original lawsuit also named George Reed, Louann Reed, Scott Jackson, and Eduardo Balderas as owners and operators of the scheme.
“The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize,” the agency reminded consumers. Those who believe they have been targeted by similar scams can report fraud at ReportFraud.ftc.gov.
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